There's a new oil-backed cryptocurrency

Signal Capital Management has launched a cryptocurrency backed by oil and gas reserves.

The new digital currency is called "PetroDollars."

Its initial coin offering is expected to take place in late 2018.

New York-based investment and holding company Signal Capital Management said on Monday that it had launched a cryptocurrency backed by oil and gas reserves in what it says is the "world's first globally compliant" oil-backed digital currency.

The new digital currency, PetroDollars, will be backed by the underlying value of recoverable reserves of crude oil and equivalents such as natural gas and condensates, and related assets.

This is not the first oil-backed digital currency in the works, not counting Venezuela's El Petro cryptocurrency attempt to skirt U.S. financial sanctions.

In December 2017, a team of banking and technology managers and former U.S. regulatory commissioners said that they were launching the world's first regulatory compliant cryptocurrency backed by a physical asset—OilCoin, which would be based on oil reserves.

A global initial coin offering (ICO) is expected to take place in late 2018 and to be up to US$700 million in size, one of the largest ICOs to date, Signal Capital Management said.

After the ICO, "each of the projected PetroDollars tokens in circulation in the year following the ICO will be backed by more than 10 barrels of oil equivalent of proved, probable, and possible recoverable oil and gas reserves, certified by a third party independent petroleum engineering firm," said the firm launching the new cryptocurrency.

According to its creators, PetroDollars is expected to be in the top 20 cryptocurrencies by total market value. It will be exchangeable for major world currencies and other cryptocurrencies. PetroDollars tokens will be nominally hard-capped at 500 million tokens, according to the White Paper of the new oil-backed digital currency.